Yanes et al v. Ocwen Loan Servicing, LLC et al

Filing 93

MEMORANDUM & ORDER granting 86 Motion to Dismiss for Failure to State a Claim; For the forgoing reasons, Ocwen's motion to dismiss the Second Amended Complaint is GRANTED. Yanes' unjust enrichment claim is DISMISSED WITH PREJUDICE. Yan es' breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, fraud General Business Law § 349 and REPSA claims are DISMISSED WITHOUT PREJUDICE and with leave to replead. If Yanes wishes to file a Third Amended Complaint he must do so within thirty (30) days of the date of this Memorandum and Order. If he fails to do so, his claims will be dismissed with prejudice. So Ordered by Judge Joanna Seybert on 2/12/2015. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
PEDRO YANES,
Plaintiff,

MEMORANDUM & ORDER
13-CV-2343(JS)(ARL)

-against–
OCWEN LOAN SERVICING, LLC,
Defendant.
---------------------------------------X
APPEARANCES
For Plaintiff:

Michael E. Herskowitz, Esq.
Law Office of Michael E. Herskowitz
1999 Flatbush Avenue, Suite 201
Brooklyn, NY 11234
Michael Andrew Lehrman, Esq.
The Hoffman Law Group, P.A.
1999 Flatbush Avenue, Suite 201
Brooklyn, NY 11234

For Defendant:

Brian M. Forbes, Esq.
David S. Versfelt, Esq.
Robert Bruce Allensworth, Esq.
Robert W. Sparkes, Esq.
K&L Gates LLP
One Lincolon Street
Boston, MA 02111

SEYBERT, District Judge:
This dispute concerning mortgage loan modifications was
commenced on April 17, 2013 by fifty-four named plaintiffs against
thirteen defendants.

Various parties were dismissed voluntarily

and on April 14, 2014, the Court severed and dismissed the claims
of all but the first named plaintiff, Pedro Yanes (“Yanes”),
finding that each plaintiff’s dispute arose out of a separate

transaction.

See Yanes v. Ocwen Loan Servicing, LLC, No. 13-CV-

2343, 2014 WL 1428013, at *3 (E.D.N.Y. Apr. 14, 2014).

Yanes was

given leave to replead and he filed a Second Amended Complaint
(Second Am. Compl. (“SAC”), Docket Entry 85.)

Defendant Ocwen

Loan Servicing, LLC (“Ocwen”) now moves to dismiss the Second
Amended Complaint.

(Docket Entry 86.)

For the following reasons,

Ocwen’s motion to dismiss is GRANTED.
BACKGROUND1
Yanes took out a mortgage on his home, which is currently
serviced by Ocwen.

(SAC ¶ 5.)

Yanes requested a mortgage loan

modification from Ocwen because he was experiencing financial
problems.

(SAC ¶ 8.)

He claims, however, that Ocwen engaged in

certain “illegal” practices with respect to his loan modification.
Specifically, Yanes claims Ocwen: (1) “ma[de] the loan application
process as onerous and complicated as possible,” (2) delayed the
application

process,

disadvantageous

[loan

and

(3)

modification]

performance impossible.”

eventually
terms

(SAC ¶¶ 16-20.)

that

offered
they

“such

rendered

Yanes claims that under

the federal Home Affordable Modification Program (“HAMP”), Ocwen
was obligated to modify qualified loans “to reduce the burden to
homeowners.”

(SAC ¶ 7.)

The following facts are taken from the Second Amended Complaint
and are presumed to be true for the purposes of this Memorandum
and Order.
1

2

After requesting a loan modification, Ocwen required
Yanes to submit a “loan modification package” and represented that
“following

the

submission

and

review

of

[the]

completed

modification package,” Yanes would receive terms for a “trial
modification.”

(SAC ¶ 12.)

Yanes

understood

that

if

he

successfully made monthly payments under the terms of the trial
loan

modification,

modification.

he

would

(SAC ¶ 12.)

be

given

a

permanent

mortgage

By submitting the documents Ocwen

requested in the loan modification package, Yanes alleges that he
“accepted

Defendant’s

offer”

thereby

the

Complaint,

forming

a

contract.

(SAC ¶ 13.)
According

to

Ocwen

delayed

the

application process and made it onerous by “providing conflicting
information . . . regarding what was required” and making Yanes
re-submit documents he already sent to Ocwen.

(SAC ¶ 16.)

Yanes

alleges that after he overcame these obstacles, Ocwen provided him
with loan modification terms, but the terms “failed to lower [his]
monthly payment in any meaningful way” and “did not extend the
life of the loan, while burdening him with substantial arrears and
penalties.” (SAC ¶¶ 20-21.) Unable to make his mortgage payments,
Yanes defaulted.

(SAC ¶ 22.)

Yanes alleges that Ocwen operated a “fraudulent loan
modification
possibility

program”
of

a

loan

and

merely

modification

3

“purport[ed]
agreement”

to

offer

while

the

actually

keeping

the

loans

it

serviced

in

default.

(SAC ¶ 38.)

Specifically, based on the above facts, Yanes brings claims against
Ocwen for breach of contract, breach of the covenant of good faith
and fair dealing, promissory estoppel, fraudulent concealment,
unjust enrichment, for violations of New York General Business Law
§ 349, and violations of the Real Estate Settlement Procedures Act
(“RESPA”).
claims.

(SAC ¶¶ 46-101.)

Ocwen moves to dismiss all of Yanes’

(Docket Entries 86-87.)
DISCUSSION

I.

Legal Standard
In deciding a Rule 12(b)(6) motion to dismiss, the Court

applies a “plausibility standard,” which is guided by “[t]wo
working principles.”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.

Ct. 1937, 173 L. Ed. 2d 868 (2009); accord Harris v. Mills, 572
F.3d 66, 71–72 (2d Cir. 2009).

First, although the Court must

accept all allegations as true, this “tenet” is “inapplicable to
legal conclusions;” thus, “[t]hreadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do
not suffice.”
72.

Iqbal, 556 U.S. at 678; accord Harris, 572 F.3d at

Second, only complaints that state a “plausible claim for

relief” can survive a Rule 12(b)(6) motion to dismiss.
U.S. at 679.

Iqbal, 556

Determining whether a complaint does so is “a

context-specific task that requires the reviewing court to draw on

4

its judicial experience and common sense.”

Id.; accord Harris,

572 F.3d at 72.
Furthermore, in deciding a motion to dismiss, the Court
is confined to “the allegations contained within the four corners
of [the] complaint.”

Pani v. Empire Blue Cross Blue Shield, 152

F.3d 67, 71 (2d Cir. 1998).

However, this has been interpreted

broadly to include any document attached to the complaint, any
statements

or

documents

incorporated

in

the

complaint

by

reference, any document on which the complaint heavily relies, and
anything of which judicial notice may be taken.

See Chambers v.

Time Warner, Inc., 282 F.3d 147, 152–53 (2d Cir. 2002) (citations
omitted); Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir.
1991).
A. Breach of Contract
Yanes alleges that a contract was formed between Ocwen
and himself and that Ocwen breached the contract.

“In order to

state a claim of breach of contract, the complaint must allege:
(i)

the

formation

performance

by

the

of

a

contract

plaintiff;

perform; and (iv) damages.”

between

(iii)

the

failure

of

parties;

(ii)

defendant

to

Johnson v. Nextel Commc'ns, Inc., 660

F.3d 131, 142 (2d Cir. 2011) (citing Eternity Global Master Fund
Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d
Cir. 2004)). To adequately allege the first element, the existence
of an agreement, “a plaintiff must plead the provisions of the

5

contract upon which the claim is based.”

James v. Countrywide

Fin. Corp., 849 F. Supp. 2d 296, 322 (E.D.N.Y. 2012) (quoting
Howell v. Am. Airlines, Inc., No. 05-CV-3628, 2006 WL 3681144, at
*3 (E.D.N.Y. Dec. 11, 2006)).

The plaintiff “need not attach a

copy of the contract to the complaint or quote the contractual
provisions verbatim.”

Id. (citations omitted).

“However, the

complaint must at least set forth the terms of the agreement upon
which liability is predicated by express reference.” Id. (internal
quotations marks omitted).
Here, Yanes failed to sufficiently plead the terms of
the agreement that Ocwen breached.

The Amended Complaint states

that Ocwen sent Yanes a “modification application package” which
required him to “provide documentation” and stated that “following
the submission and review of a completed modification package”
Yanes would be given “terms to make payments as part of a trial
modification.”

(SAC ¶¶ 11-12.)

Yanes characterizes his receipt

of Ocwen’s modification package as an “offer[]” which he accepted
by “performance of the terms specified in Defendant’s offer.” (SAC
¶ 14.)

Yanes further claims that Ocwen breached the contract by

making the application process “onerous and complicated” and by
eventually offering Yanes “such disadvantageous [modification]
terms

that

they

(SAC ¶ 16, 20.)

rendered

[his]

performance

impossible.”

Nowhere in his narrative, however, does Yanes set

forth the specific terms of the contract he claims Ocwen breached.

6

It is unclear from the face of the Second Amended Complaint whether
Yanes is alleging that Ocwen beached the terms of the trial
modification

application,

the

terms

of

a

loan

modification

agreement, or both. Neither agreement is attached to the Complaint
or discussed in sufficient detail to piece together their material
terms.

Without pleading the terms of the contract or contracts

that Yanes relies upon, his claim fails.

See James v. Countrywide

Fin. Corp., 849 F. Supp. 2d 296, 322 (E.D.N.Y. 2012) (dismissing
a complaint that failed to “specifically identif[y] the contract
(or contracts) at issue and . . . the terms of the agreement that
defendant purportedly breached”); Howell v. Am. Airlines, Inc.,
No. 05-CV-3628, 2006 WL 3681144, at *4 (E.D.N.Y. Dec. 11, 2006)
(dismissing a complaint that failed to “identify the agreement at
issue” or “indicate which terms in that agreement were allegedly
breached”); Valentini v. Citigroup, Inc., 837 F. Supp. 2d 304, 327
(S.D.N.Y.

2011)

(“Plaintiffs

fail

to

identify

what

specific

provisions of the contract they claim Defendants breached.”);
Tray-Wrap, Inc. v. Veneman, No. 02-CV-6898, 2004 WL 2346619, at *4
(S.D.N.Y.

Oct.

18,

2004)

(“[C]onclusory

allegations

cannot

establish the existence of a valid contract.”); cf. Wigod v. Wells
Fargo Bank, N.A., 673 F.3d 547, 556 (7th Cir. 2012) (explaining
that the plaintiff “attached to her complaint her trial loan
modification

agreement

. . .

along

7

with

a

variety

of

other

documents

produced

in

the

course

of

the

parties’

commercial

relationship”).
Yanes argues that his breach of contract claim should
not be dismissed because the pleading requirements of his claim is
governed by Rule 9(c) of the Federal Rules of Civil Procedure,
which sets forth the standard for pleading conditions precedent.
Specifically, Rule 9(c) provides that “[i]n pleading conditions
precedent, it suffices to allege generally that all conditions
precedent have occurred or been performed.”

FED. R. CIV. P. 9(C).

Plaintiff claims that because he adequately pled the performance
of certain conditions precedent, he alleged the necessary elements
of a breach of contract claim.
2-3.)

(Pl.’s Opp., Docket Entry 89, at

But Yanes argument misses the point.

The Second Amended

Complaint does not adequately identify the terms of the contract
Ocwen breached.

Whether or not Yanes properly alleged that he

satisfied certain conditions is irrelevant, since the terms of the
contract were not properly pled.

Cf. Mendez v. Bank of Am. Home

Loans Servicing, LP, 840 F. Supp. 2d 639, 646 (E.D.N.Y. 2012)
(upholding

a

breach

of

contract

claim

based

upon

a

loan

modification offer when the terms of the offer were identified in
the complaint).
Yanes’ breach of contract claim is also flawed for other
reasons.
performed

The
his

Amended

Complaint

obligation

to

fails

make

8

to

mortgage

allege

that

payments,

Yanes
either

pursuant

to

his

original

modification agreement.

mortgage

agreement

or

a

temporary

See Nichols v. BAC Home Loans Servicing

LP, No. 13-CV-0224, 2013 WL 5723072, at *10 (N.D.N.Y. Oct. 18,
2013) (dismissing a breach of contract claim because, inter alia,
the plaintiff failed to allege that he performed by making mortgage
payments).

Moreover, Yanes does not provide sufficient detail in

the Second Amended Complaint to determine whether the agreements
he relies upon were written and therefore satisfy the Statute of
Frauds.

See In re Ne. Indus. Dev. Corp., 513 B.R. 825, 841

(S.D.N.Y. 2014) (“In New York, the modification of a mortgage is
‘subject to [the] statute of frauds and accordingly[ ] must be in
writing to be enforceable and signed by the party to be charged.’”
(alterations in original) (quoting Onewest Bank, FSB v. Davies,
No. 16638–11, 2013 WL 846573, at *5 (N.Y. Sup. Ct. Suff. Co.
Feb. 22, 2013)).

For all of these reasons, Yanes’ breach of

contract claim is DISMISSED.
B. Breach of the Covenant of Good Faith and Fair Dealing
Ocwen moves to dismiss Yanes’ claim for breach of the
implied covenant of good faith and fair dealing because Yanes
failed to allege the existence of a valid contract.
Docket Entry 87, at 7.)

The Court agrees.

(Def.’s Br.,

“Under New York law,

implicit in all contracts is a covenant of good faith and fair
dealing in the course of the contract performance.”

DBT Gmbh v.

J.L. Mining Co., 544 F. Supp. 2d 364, 384 (S.D.N.Y. 2008) (internal

9

quotation marks and citations omitted).

Nevertheless, “[a] breach

of the implied covenant of good faith and fair dealing is merely
a breach of the underlying contract.”

Kapsis v. Am. Home Mortgage

Servicing Inc., 923 F. Supp. 2d 430, 452 (E.D.N.Y. 2013) (citation
and internal quotation marks omitted).

Thus, absent the existence

of a binding agreement, there can be no breach of the implied
covenant of good faith and fair dealing.

Id.; Arroyo v. PHH

Mortgage Corp., No. 13-CV-2335, 2014 WL 2048384, at *9 (E.D.N.Y.
May 19, 2014) (stating that the plaintiff “must first allege the
existence of a valid contract in order to maintain her claim”).
Since Yanes failed to adequately allege the existence of a binding
agreement, his claim for beach of the implied covenant of good
faith and fair dealing is DISMISSED.
C. Promissory Estoppel
Ocwen also moves to dismiss Yanes’ promissory estoppel
claim on several grounds.
estoppel

should

be

Ocwen argues that Yanes promissory

dismissed

because

(1)

it

is

“vague

and

conclusory” and (2) it is governed by an express agreement.
(Def.’s Br. at 12-13.)

Yanes responds that the Second Amended

Complaint adequately alleges that Yanes was promised he would
receive “reasonable [loan] modification terms” as long as he
“completed all submission requirements.”

(Pl.’s Opp. at 9.)

“Under New York law, the elements of promissory estoppel
are

(i)

a

clear

and

unambiguous

10

promise

by

the

promisor;

(ii) reasonable and foreseeable reliance by the promisee; and
(iii) an injury to the promisee.”

Braun v. CMGI, Inc., 64 F. App’x

301, 304 (2d Cir. 2003) (citation omitted); Cyberchron Corp. v.
Calldata

Sys. Dev., Inc., 47 F.3d 39, 44 (2d Cir. 1995).

Here,

Yanes has not adequately alleged that Ocwen made him a “clear and
unambiguous promise.”

Winkler v. Friedman, No. 12-CV-3893, 2013

WL 3226763, at *11 (E.D.N.Y. June 25, 2013) (citation and internal
quotation marks omitted).
that

“following

the

Yanes alleges that Ocwen represented

submission

and

review

of

a

completed

modification package, [he] would be given terms to make payments
as part of a trial modification.”

(SAC ¶ 12.)

As described in

the Second Amended Complaint, Ocwen’s commitment was merely an
invitation to apply for a trial loan modification, not a promise
to provide specific loan modification terms.

See Reprosystem,

B.V. v. SCM Corp., 727 F.2d 257, 265 (2d Cir. 1984) (no promissory
estoppel when obligations “were contingent upon execution and
delivery of the formal contract documents”).

Wilson v. Dantas,

746 F.3d 530, 538 (2d Cir. 2014) (vague allegation of “assurances”
did not amount to a clear and unambiguous promise).

Moreover,

Yanes admits in the Second Amended Complaint that Ocwen did
eventually provide him with trial loan modification terms, but he
claims--without elaboration--that the terms were unreasonable.
Yanes has not alleged an unambiguous promise that can support an

11

estoppel

claim.

His

promissory

estoppel

claim

is

therefore

DISMISSED.
D. Fraudulent Concealment
Ocwen
allegation

argues

should

be

that

Yanes’

dismissed

fraudulent

because

the

concealment

Second

Amended

Complaint is devoid of specific allegations sufficient to maintain
a fraud claim.
“To

(Def.’s Br. at 13.)
state

misrepresentation,

a
a

cause

of

plaintiff

The Court agrees.
action
must

for
show

fraud
an

based

on

intentional

misrepresentation of a material fact resulting in some injury.”
Malmsteen v. Berdon, LLP, 477 F. Supp. 2d 655, 663 (S.D.N.Y. 2007)
(internal quotation marks omitted) (quoting Held v. Kaufman, 91
N.Y.2d 425, 694 N.E.2d 430, 433, 671 N.Y.S.2d 429 (1998)).

To

maintain a fraud claim based on concealment, a plaintiff must also
demonstrate that defendant had a “duty to disclose the material
information.”

See Woods v. Maytag Co., 807 F. Supp. 2d 112, 119

(E.D.N.Y. 2011).
9(b)

requires

In addition, Federal Rule of Civil Procedure

that

a

party

alleging

fraud

“must

state

with

particularity the circumstances constituting fraud or mistake.”
FED. R. CIV. P. 9(b).

To satisfy this heightened pleading standard,

“the allegations should specify the time, place, speaker, and
sometimes

content

of

the

alleged

misrepresentations.”

Four

Seasons Solar Prods. Corp. v. Southwall Techs., Inc., 100 F. App’x

12

12, 13 (2d Cir. 2004) (internal quotation marks and citation
omitted).
Applying these standards, Yanes’ allegations come up
short.

The Complaint states in very general terms that “Defendant

used fraud and artifice to keep Plaintiff in default on his
mortgage by promising opportunities for loan modification when it
had

no

intention

(SAC ¶ 68.)

of

providing

such

permanent

modification.”

Moreover, Yanes’ claim that Ocwen was engaged in a

scheme to keep him in default is based solely upon the conclusory
statement that “[u]pon information and belief, Defendant has been
operating a fraudulent loan modification program.”

(SAC ¶ 38.)

Conclusory allegations are insufficient to state a claim for fraud.
See Arroyo v. PHH Mortg. Corp., No. 13-CV-2335, 2014 WL 2048384,
at *9 (E.D.N.Y. May 19, 2014).

Because Yanes has not alleged any

facts to support his fraudulent concealment claim, it is DISMISSED.
E. Section 349 of the New York General Business Law
Ocwen moves to dismiss Yanes’ claim for violation of New
York’s

General

Business

Law

§

349.

Section

349

prohibits

“[d]eceptive acts or practices in the conduct of any business,
trade or commerce or in the furnishing of any service.”

N.Y. GEN.

BUS. LAW § 349(a). “To state a claim under Section 349, ‘a plaintiff
must demonstrate that (1) the defendant’s deceptive acts were
directed at consumers, (2) the acts are misleading in a material
way, and (3) the plaintiff has been injured as a result.’” Kapsis,

13

923 F. Supp. 2d at 449 (quoting Maurizio v. Goldsmith, 230 F.3d
518, 521 (2d Cir. 2000)).

Consumer-oriented conduct is “conduct

that potentially affects similarly situated consumers.”

Kapsis,

923 F. Supp. 2d at 449 (internal quotation marks and citation
omitted).
estate

“To satisfy this requirement in the context of a real

transaction,

courts

have

generally

required

that

a

plaintiff allege that the defendant affirmatively and publicly
sought transactions with consumers.”

Hayrioglu v. Granite Capital

Funding, LLC, 794 F. Supp. 2d 405, 410 (E.D.N.Y. 2011).

“Thus,

when courts have found § 349 applicable in the context of real
estate transactions, they have usually done so where defendant
published
public.”

advertisements

or

otherwise

solicited

the

general

Sheehy v. New Century Mortg. Corp., 690 F. Supp. 2d 51,

74 (E.D.N.Y. 2010) (collecting cases).

It has been established,

however, that “[p]rivate contract disputes, unique to the parties
. . . [do] not fall within the ambit of [Section 349].”

Oswego

Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 85
N.Y.2d 20, 25, 647 N.E.2d 741, 744, 623 N.Y.S.2d 529, 532 (1995).
Yanes allegations are insufficient to make out the first
element of a Section 349 claim because he failed to plead facts
showing that the deceptive conduct at issue went beyond his
contractual dispute with Ocwen.

Yanes argues that he properly

pleaded that Ocwen’s conduct was directed at consumers by alleging
in the Second Amended Complaint that he as well as “consumers at

14

large” were “persuaded by Defendant’s marketing to seek mortgage
assistance” and that Ocwen misrepresented that a loan modification
was a viable option for homeowners, when in fact Ocwen never
intended to enter into a loan modification agreement.
at 14; SAC ¶ 8.)

(Pl.’s Opp.

Although Yanes speculates that other consumers

were treated similarly to him, he does not allege any facts to
support that assertion.

See O.K. Petroleum v. Travelers Indem.

Co., No. 09-CV-10273, 2010 WL 2813804, at *5 (S.D.N.Y. July 15,
2010) (“In order to survive this motion, Plaintiffs were required
to plead facts showing that the deceptive conduct went beyond the
contractual dispute between these parties.”); Cross v. State Farm
Ins. Co., No. 10-CV-1179, 2011 WL 4916534, at *4 (N.D.N.Y. Oct.
17, 2011) (“Although Plaintiff speculates that others have been
treated in similar fashion, [his] allegations are insufficient to
state a plausible General Business Law § 349 claim.”).

Therefore,

Yanes’ claim under Section 349 is DISMISSED.
F. Unjust Enrichment
Ocwen argues that Yanes’ unjust enrichment claim should
also be dismissed because unjust enrichment is a quasi-contract
remedy, which is inapplicable when there is a written agreement.
(Def.’s Br. at 20.)

In addition, Ocwen argues that Yanes’ unjust

enrichment allegations fails as a matter of law because they are
vague and conclusory.

(Def.’s Br. at 20.)

The Second Amended

Complaint appears to allege that Ocwen was unjustly enriched

15

because it delayed offering Yanes loan modification terms, thereby
causing the interest on his mortgage to increase and “strip[ing]”
him of equity in his home.

(SAC ¶¶ 92, 94.)

To properly plead unjust enrichment, a complaint must
state “‘(1) that the defendant benefitted; (2) at the plaintiffs’
expense;

and

(3)

restitution.’”

that

equity

and

good

conscience

require

McAnaney v. Astoria Fin. Corp., 665 F. Supp. 2d

132, 175 (E.D.N.Y. 2009) (quoting Beth Israel Med. Ctr. v. Horizon
Blue Cross and Blue Shield of N.J., Inc., 448 F.3d 573, 586 (2d
Cir. 2006)).

Since unjust enrichment is a quasi-contract remedy,

it is generally only applicable in the absence of a written
agreement. Id. However, “a party is not precluded from proceeding
on both breach of contract and quasi-contract theories where there
is a bona fide dispute as to the existence of a contract.”

Curtis

Props. Corp. v. Greif Cos., 236 A.D.2d 237, 239, 653 N.Y.S.2d 569,
571 (1st Dep’t 1997); see Nakamura v. Fujii, 253 A.D.2d 387, 390,
677 N.Y.S.2d 113, 116 (1st Dep’t 1998).
Although there is some dispute about whether a valid
contract was ever formed governing Yanes’ loan modification, there
is no dispute that a valid mortgage agreement existed under which
Yanes was required to make mortgage payments.

Nevertheless, Yanes

claims that a benefit was conferred on Ocwen when his modification
application period was wrongfully delayed because the amount of
money Yanes owed Ocwen increased.

16

(See SAC ¶ 93.)

The problem

with his theory, however, is that the primary reason his debt
increased during the application period is because he could not
make his agreed-upon mortgage payments.

(See SAC ¶ 22.)

Thus, it

is somewhat disingenuous to say Ocwen received a benefit during
the application period when it was not receiving Yanes’ mortgage
payments.

Since any alleged benefit Ocwen received was governed

by the parties existing modification agreement, Ocwen could not
have been unjustly enriched by the conduct Yanes complains of.
See Fitzgerald v. Chase Home Fin., LLC, No. 10-CV-4148, 2011 WL
9195046, at *7 (S.D.N.Y. Feb. 28, 2011).

Since Yanes’ unjust

enrichment claim fails as a matter of law it is DISMISSED WITH
PREJUDICE.
G. RESPA Claim
Finally,
allegations.

Ocwen

moves

to

dismiss

Yanes’

RESPA

Yanes alleges that Ocwen violated Section 2605 of

RESPA by failing to timely and properly respond to a qualified
written request (“QWR”) that he sent Ocwen.

(SAC ¶ 98.)

In

addition, he claims Ocwen failed to properly respond to Yanes
“Notice of Error” pursuant to 12 CFR 1024.35(e)(3).
Congress

enacted

REPSA

to

“insure

(SAC ¶ 100.)

that

consumers

throughout the Nation are provided with greater and more timely
information on the nature and costs of the settlement process and
are protected from unnecessarily high settlement charges caused by
[ ] abusive practices that have developed in some areas of the

17

country.”
debtor

12 U.S.C. § 2601.

may

submit

a

QWR

“Under Section 2605 of RESPA, a

to

the

servicer

‘information relating to [ ] servicing.’”
at 444 (quoting 12 U.S.C § 2601(a)).

of

its

loan

for

Kapsis 923 F. Supp. 2d
To survive a motion to

dismiss, a plaintiff bringing a Section 2605 claim must, in
addition

to

showing

defendant's

failure

to

comply

with

the

provisions of Section 2605, identify actual damages that he or she
sustained as a result of defendant’s alleged violation(s).

Id.

Plaintiff’s

the

RESPA

allegation

existence of actual damages.

does

not

adequately

allege

Yanes claims he suffered “financial

loss and severe mental anguish and emotional distress over facing
the loss or possible loss of his home.”
assertion

that

the

plaintiff

(SAC ¶ 101.)

merely

insufficient to state claim under RESPA.
2d

at

448

borrowers’

(the

allegation

payments

on

that

the

a

loan”

suffered

A conclusory
“damages”

is

Cf. Kapsis, 923 F. Supp.

servicer

“misapplied

sufficiently

pled

the

actual

damages); Hutchinson v. Del, Sav. Bank FSB, 410 F. Supp. 2d 374,
383

(D.N.J.

2006)

(holding

that

the

plaintiffs

sufficiently

pleaded actual damages when they claimed they suffered “negative
credit ratings on their credit reports [and] the inability to
obtain and borrow another mortgage loan and other financing”)
(internal quotation marks omitted).

In addition, Yanes does not

sufficiently allege how Ocwen’s failure to respond to his requests
proximately caused his damages.

See Bonadio v. PHH Mortg. Corp.,

18

No. 12-CV-3421, 2014 WL 522784, at *6 (S.D.N.Y. Jan. 31, 2014)
(“simply saying that . . . the servicer’s failure to respond to a
QWR caused damages without specifying how those damages were
caused, is not enough to survive a motion to dismiss.” (internal
quotation marks and citation omitted)).

Therefore, Yanes’ RESPA

claim is DISMISSED.
II. Leave to Replead
The Second Circuit has stated that “[w]hen a motion to
dismiss is granted, the usual practice is to grant leave to amend
the complaint.”

Hayden v. Cnty. of Nassau, 180 F.3d 42, 53 (2d

Cir. 1999); see also FED. R. CIV. P. 15(A)(2) (“The court should
freely

give

leave

[to

amend]

when

justice

so

requires.”).

“Nonetheless, courts may deny leave to replead where amendment
qualifies as futile.”

Herbert v. Delta Airlines, No. 12–CV–1250,

2014 WL 4923100, at *5 (E.D.N.Y. Sept. 30, 2014) (citing Cuoco v.
Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000)).

Because the

Second

Amended Complaint is Yanes’ first attempt to plead his individual
claims, divorced from the allegations of his former co-plaintiffs,
the Court grants Yanes one final opportunity to replead.

Yanes is

specifically granted leave to replead his breach of contract,
breach of the covenant of good faith and fair dealing, promissory
estoppel, fraud, General Business Law § 349 and REPSA claims.
Since Yanes’ unjust enrichment claim fails as a matter of law,
however, it is DISMISSED WITH PREJUDICE.

19

CONCLUSION
For the forgoing reasons, Ocwen’s motion to dismiss the
Second Amended Complaint is GRANTED.
claim is DISMISSED WITH PREJUDICE.

Yanes’ unjust enrichment
Yanes’ breach of contract,

breach of the covenant of good faith and fair dealing, promissory
estoppel, fraud General Business Law § 349 and REPSA claims are
DISMISSED WITHOUT PREJUDICE and with leave to replead.

If Yanes

wishes to file a Third Amended Complaint he must do so within
thirty (30) days of the date of this Memorandum and Order.

If he

fails to do so, his claims will be dismissed with prejudice.

SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

February
12 , 2015
Central Islip, NY

20